ArbitrationA player and club who cannot agree on a contract may agree to salary arbitration, provided the player has enough Major League service time. CBA, Article VI F.

EligibilityThe following players are eligible for arbitration:

Players with at least 3 but less than 6 years of Major League service time.

The top 22 percent of players with at least 2 but less than 3 years of Major League service, provided the player earned at least 86 days of service in the previous season. (See Super 2.) If two or more players are tied in qualifying for the top 22 percent, all such players qualify. A year of service is 172 days. The cutoff point for Super 2 status after the 2017 season was 2 years, 123 days of service. (Beginning with the 2013 season, the group of two-plus players qualifying for arbitration was expanded from the top 17 percent to 22 percent.)

Offer requirements

A club must offer contracts to players under its control by December 12.

The club’s salary offer to a player under its control (pre-free agency players) may not be less than 80% of the player’s salary and performance bonuses the previous year or less than 70% of his salary and performance bonuses from 2 years earlier. (Exception: If a player won an arbitration award the previous year increasing his salary 50% or more, the 80% requirement does not apply.)

Procedure

In mid-January, eligible players may file for salary arbitration, and three days later, the player and the club each submit a salary figure for arbitration. The parties may continue to negotiate until the case goes before a three-person panel of professional arbitrators between Feb. 1-20.

At the hearing, each party has one hour to argue its case and 30 minutes for rebuttal. The player is required to attend and generally represented by an agent. A club executive or attorney usually represents the club.

Criteria the panel may consider include the player’s contribution to the club in terms of performance and leadership, the club’s record and attendance, “special accomplishments,” the salaries of comparable players in his service-time class and, for players with less than 5 years of service, the class one year ahead of him. The parties may not refer to team finances, previous offers made during negotiations, the Competitive Balance Tax, comments from the press or salaries in other sports or occupations.

The panel, without opinion, awards the player a one-year, non-guaranteed contract at one salary or the other. If the player is cut between 1 and 15 days before the season begins, he is entitled to 30 days’ termination pay. If the player is cut during spring training but on or after the 16th day before the season begins, he is entitled to 45 days’ termination pay. Non-guaranteed contracts become fully guaranteed Opening Day.

Bereavement ListSee Family Medical Emergency List.

Designated for Assignment (DFA)A player designated for assignment is removed from his club’s 40-man roster and, within the next seven days, traded, released or, if he clears waivers, assigned to the minor leagues. A club may not designate a player for assignment if the corresponding transaction is to recall a player on optional assignment.

A player designated for assignment may be traded. A club interested in acquiring a player who has been designated for assignment may try to work out a trade before the player is placed on waivers, eliminating the possibility he might be claimed by a club with a higher waiver claim priority.

A player designated for assignment who clears waivers and is not traded may be released. The player then becomes a free agent.

A club wishing to send a player designated for assignment to the minor leagues must first place him on irrevocable outright waivers, making him available to the other 29 clubs in reverse order of won-lost record.

If the player is claimed, he is lost to the claiming team for $20,000. (Irrevocable waivers may not be reversed.) The claiming team is responsible for the balance of the contract.

If the player is not claimed (clears waivers), the club may option him or assign him outright to the minor leagues, though he must continue to be paid according to the terms of his contract. A player may be assigned outright to the minors only once in his career without his permission. Thereafter, he may either 1) reject the assignment and become a free agent, or 2) accept the assignment and become a free agent at the end of the season if he’s not back on the 40-man roster. Additionally, player with 3 years of major league service may refuse an outright assignment and choose to become a free agent, regardless of whether he has been sent outright to the minors previously. A player with 5 years of major league service time who refuses an outright assignment is entitled to the money due according to the terms of his contract.

Disabled ListA club may place an injured player on the seven- or 10- or 60-day disabled list by submitting to the commissioner’s office an application, accompanied by a diagnosis from the club physician. A player on either list continues to accumulate Major League service time, but he must remain inactive for a minimum of seven, 10 or 60 days, with Day 1 beginning after the player’s last game appearance. A club may make the placement of a player on either list retroactive to the last date on which he played, up to a maximum backdating of 10 days. A club may send a player on the DL to the minor leagues for a rehab assignment lasting a maximum of 20 days for position players and 30 days for pitchers.

Seven-Day Disabled List for Concussions

Beginning with the 2011 season, a player who suffers a concussion may be placed on a seven-day disabled list, with a designated club specialist submitting a detailed report, including medical information and video of how the injury occurred, to Major League Baseball’s medical director. The seven-day list may not be used for players with injuries other than a concussion.

A player on the seven-day disabled list does not count against the 25-man active roster but continues to count against the 40-man roster. A player may be activated — with approval of the designated club specialist and MLB’s medical director — beginning Day 8. If the player is not reinstated by Day 14, he automatically is transferred to the 10-day disabled list.

10-Day Disabled List

A player on the 10-day disabled list does not count against the 25-man active roster but continues to count against the 40-man roster. There is no limit to the number of players a club may put on the 10-day disabled list. A player may be activated beginning Day 11, though the club is not required to reinstate him at any specific time. The 10-day term replaced the 15-day disabled list with the 2017-21 CBA.

A player may be transferred from the 10-day list to the 60-day list, but the opposite is not permitted. If a player is transferred, his time on the 10-day list is credited toward the minimum stay on the 60-day list.

60-Day (Emergency) Disabled List

A player on the 60-day disabled list does not count against either the 25-man or 40-man roster. A player may be activated beginning Day 61, though the club is not required to reinstate him at any specific time. A player placed on the 60-day list after August 1 remains there for the rest of the season.

There is no limit to the number of players a club may put on the 60-day list, but a player may not be placed on (or transferred to) the 60-day list unless the club’s 40-man roster is full. Once the season ends, a player on the 60-day disabled list must be reinstated to the 40-man roster or designated for assignment.

Disqualified ListIf a player violates the terms of his contract, his club may petition MLB to have him placed on the disqualified list, allowing the club to replace him on both the 25-man and 40-man rosters. For example, a player who reports but refuses to play, despite being otherwise able to do so, may be placed on the disqualified list. A player on the disqualified list is not paid and does not earn service time.

Family Medical Emergency ListA club may place a player experiencing a family emergency or the death of a loved one on the family medical emergency list with permission from the commissioner’s office. The player may spend between three and seven days on the list, and during that period, his club may replace him on the active 25-man roster. A player on the family medical emergency list continues to accumulate Major League service time. However, if an absence extends more than seven days, the club must resort to placing the player on the restricted list, where he is not paid and does not earn service time.
The family medical emergency list, then known as the bereavement list, was instituted on a temporary basis for the 2003 season. The seven-day leave was made permanent in April, 2004. The list of relatives whose death would entitle a player to take leave has been extended to in-laws. A club may not use the family medical emergency list to replace a player who leaves his club for the birth of a child.

First Year Player Draft
(Amateur Rule 4 Draft)MLB holds its First Year Player Draft in early June. The 30 clubs select players in reverse order of won-lost records from the previous season. If two or more clubs finished with identical records in the previous season, the earlier draft pick is awarded to the team that finished with the worst record two seasons ago. The draft order also may be altered if a club receives an additional draft pick (or picks) as compensation 1) for losing a free agent to another club or 2) for failing to sign a player selected in the previous year’s draft. Additionally, MLB awards Competitive Balance Selections after the first or second round to Clubs in alternating years in bottom-10 markets or bottom-10 in local revenue based on a combination of local revenue and winning percentage.
The draft runs no longer than 40 rounds. Each club may select only one player for each of its major league, Triple-A and Double-A rosters but is not limited to the number of picks for the Single-A level. (Choices no longer alternate between leagues, as they did before MLB ended the practice after the 2004 draft.) Clubs are not permitted to trade a draft pick, though draft picks awarded through the Competitive Balance Lottery may be traded, subject to certain restrictions. A drafted player may not be traded until after the World Series.

EligibilityThe following are eligible to be selected in the First Year Player Draft (MLR 4):

Residents of the U.S., Canada, Puerto Rico and any other U.S. territories who have not previously signed minor- or major-league contracts.

Non-residents attending high school or college in the United States.

Previous draftees who did not sign contracts, chose to enroll in four-year colleges and subsequently completed their junior year in college or turned 21 years old.

All other foreign-born players are ineligible. (See International Players.)

Procedure

Before the draft, each club is assigned an aggregate Signing Bonus Pool, consisting of the total of the sum of the designated signing bonuses for their picks in the first 10 rounds. Players selected after the 10th round do not count against a club’s Pool if they sign for a bonus less than $125,000 (previously $100,000). Any money in excess of $125,000 counts against a club’s Pool. The Pool amount for each club takes into account any additional selections a club obtains in a trade, as compensation for losing a free agent, for failure to sign a drafted player from the previous year’s draft, and through the Competitive Balance or Forfeited Draft Pick Lotteries.

A club exceeding its Signing Bonus Pool by 0-5 percent pays a 75 percent tax on the overage. Penalties then increase, with a 75-percent tax and loss of a first-round draft pick for a 5-10 percent overage, a 100-percent tax and loss of a first- and second-round draft pick for a 10-15 percent overage, and a 100-percent tax and loss of first-round picks in the next two drafts for an overage of more than 15 percent. Draft picks surrendered as penalties are distributed to other clubs through a Forfeited Draft Pick Lottery based on each club’s revenue and winning percentage in the previous season.

The 10 teams with the lowest revenues and the 10 teams in the smallest markets may receive additional selections in a Competitive Balance Lottery for the six draft picks after the end of the first round and the six draft picks after the end of the second round. A club receiving a Competitive Balance Lottery draft pick has the right to trade the pick to another club.

Clubs are deemed to have automatically offered each draft pick a minor-league contract with no signing bonus. Players selected in the Rule 4 draft may not sign Major League contracts.

A club holds exclusive negotiating rights with a drafted player until mid-July (between July 12 and July 18, depending on the date of the All-Star Game).

The signing deadline does not apply to college seniors or players from an independent league. The deadline for signing those players is the next First Year Player Draft.

Previously, once a drafted player had signed a contract, he could not be traded until an entire year has elapsed (Incaviglia Rule). However, MLB announced in May, 2015, that players drafted in 2015 and thereafter now may be traded after the World Series. Amateur free agents from Latin America, Asia or Australia may be traded at any time after signing.

Failure to Sign

A drafted player who does not sign and attends a four-year college is not eligible for the draft again until he completes his junior year of college or turns 21 years old.

A drafted player who does not sign and does not attend class at a four-year college is eligible for the next First Year Player Draft. A club may not draft a player in two consecutive drafts without the player’s written consent.

If a club does not sign one of the players it selected in the first 10 rounds, the suggested bonus for the pick is subtracted from the club’s Signing Bonus Pool.

If a team does not sign its pick in the first two rounds (including the supplemental round between the two), it receives a compensatory selection in the following year’s Rule 4 Draft that is one pick after the slot of the player who did not sign.

If a team does not sign its third-round selection, it receives a compensatory selection in a supplemental round between the third and fourth rounds in the following year’s draft.

Free Agency

Eligibility1. Article XX (B). A player with at least 6 years of Major League service time and no contract for the next season is eligible for free agency and may negotiate with any club. CBA, Article XX (B).
2. Outright of a three-year player. A player with three years of Major League service who is assigned outright to the minor leagues may 1) refuse the assignment and elect immediate free agency or 2) accept the assignment and elect free agency between the end of the Major League season and Oct. 15, unless the player is returned to the Major League roster before electing free agency. A player who qualified for arbitration as a Super Two in the previous off-season and is subsequently sent outright to the minor leagues may refuse the assignment and elect immediate free agency but may not accept the assignment and elect free agency at the end of the season.
3. Second outright assignment. A player who is assigned outright to the minor leagues for the second time for any subsequent time in his career may 1) refuse the assignment and elect immediate free agency or 2) accept the assignment and elect free agency between the end of the Major League season and Oct. 15, unless the player is returned to the Major League roster before electing free agency.

Procedure

Qualified players become Article XX (B) free agents at 9 a.m. ET on the first day after the World Series ends. (Under previous CBAs, players had to file for free agency during a window after the World Series.)

During a five-day “Quiet Period” after the World Series ends, a free agent’s former club retains exclusive negotiating rights with him. The player may engage in general discussions with other clubs but may not discuss contract details or sign with them.

If a player was under contract with his former club since Opening Day of the previous season, the club may make him a Qualifying Offer of a one-year contract in the amount of the average salary of the 125 highest-paid players in the game. (The amount for the 2012-13 off-season was $13.3 million. The amount increased to $14.1 million for 2013-14, $15.3 million for 2014-15, $15.8 million for 2015-16, $17.2 million for 2016-17 and $17.4 million for 2017-18.) A Qualifying Offer must be made during the five-day Quiet Period. A player may accept a Qualifying Offer during the “Acceptance Period,” a 10-day window after the Quiet Period. (The Acceptance Period was expanded from seven days in the 2017-21 CBA.) If the player accepts the offer, he returns to the club’s roster. If the player rejects the Qualifying Offer, he may negotiate with any of the 30 clubs. A former club is not entitled to compensation when a free agent signs elsewhere unless the club made the player a Qualifying Offer. See Free Agent Compensation.

No contract shall include any provision in which the club promises not to make a Qualifying Offer or in which the player promises not to accept a Qualifying Offer. (Under previous CBAs, a club could promise not to make an offer of arbitration to pending free agents.)

The exercise dates for option seasons in any contract must fall within the five-day Quiet Period after the World Series ends.

A free agent who signs a contract after the Quiet Period may not be traded without his written consent before June 16 of the following season.

If a club signs a free agent to a minor-league contract between the end of the Quiet Period and 10 days before Opening Day, the club must 1) pay a $100,000 retention bonus if the player is notified five days before Opening Day that he will not make the Opening Day roster, or 2) provide the player with his unconditional release. If a club retains the player by paying the $100,000 bonus, he may require the club to release him if he is not on the Major League roster by June 1. (The player and club are free to negotiate an earlier opt-out date or a retention bonus of more that $100,000.)

Free Agent CompensationA club is entitled to compensation when a free agent signs elsewhere if 1) he had played with the former club since Opening Day of the previous season, 2) the club made the player a Qualifying Offer in the amount of the average salary of the 125 highest-paid players in the game, and 3) the player declined the Qualifying Offer and signed a Major League contract with another club before the next Rule 4 First Year Player Draft. A club may not make a Qualifying Offer to a player who has previously received a Qualifying Offer in his career.

Amounts for Qualifying Offers in recent off-seasons:

2012-13: $13.3 million

2013-14: $14.1 million

2014-15: $15.3 million

2015-16: $15.8 million

2016-17: $17.2 million

2017-18: $17.4 million

The free agent’s former club receives a supplemental draft pick in one of three categories: 1) A Revenue Sharing Payee club (not disqualified by market size) receives a selection immediately after the first round if the player signs a contract with a total guarantee of $50 million or more, 2) A Competitive Balance Tax Payor club receives a selection immediately after the fourth round, or 3) all other former clubs receive a selection immediately after Competitive Balance Round B, which follows the second round. If more than one club is entitled to a supplemental pick, selections are awarded in reverse order of won-loss percentage in the recently completed season.
Under the 2017-21 CBA, the free agent’s new club no longer forfeits its highest-available selection in the next Rule 4 First Year Player Draft. The free agent’s new club now loses a draft pick in one of three categories: 1) A Revenue Sharing Payee club (not disqualified by market size) forfeits its third-highest remaining selection in the next Rule 4 draft, 2) A Competitive Balance Tax Payor club forfeits its second-highest and fifth-highest remaining selections in the next Rule 4 draft and forfeits $1,000,000 of its International Signing Bonus Pool in the next full Signing Bonus Period, or 3) all other new clubs forfeit their second-highest remaining selection in the next Rule 4 draft and forfeit $500,000 of their International Signing Bonus Pool in the next full Signing Bonus Period. All forfeited International Bonus Pool proceeds are distributed equally among all other clubs. Competitive Balance Selections are exempt from forfeiture.

International PlayersInternational players generally must be signed either as free agents or through the posting system for Japanese players. However, two groups of international players are eligible for the First Year Player Draft: 1) Canadian players, and 2) non-residents who attend high school or college in the United States.
Foreign-born players from the Dominican Republic, Venezuela, Mexico, Panama, South Korea, Taiwan, Australia and other countries are free agents. They may sign with any Major League club during the international signing period, which begins July 2 and runs through mid-June the next year. To be eligible to sign a contract, a player must be 16 years old at the time of signing and turn 17 years old by either 1) September 1 or 2) the end of his first professional season, whichever is later. Players also must register with the MLB Scouting Bureau.
Each club is assigned an aggregate international Signing Bonus Pool in one of three categories: 1) Clubs receiving a Competitive Balance Pick in Round A of the Rule 4 draft receive a Signing Bonus Pool of $5.25 million, 2) Clubs receiving a Competitive Balance Pick in Round B of the Rule 4 draft receive a Signing Bonus Pool of $5.75 million, 3) all other clubs receive a Signing Bonus Pool of $4.75 million. Amounts will increase with industry revenues in future years. For the 2018-19 Signing Period, pool allotments are $6,025,400, $5,504,500 and $4,983,500.

Pool figures now act as a hard spending cap, with clubs not allowed to exceed Signing Bonus Pools, a change put in place for the 2017-18 Signing Period. Bonuses of $10,000 or less do not count toward a club’s pool. In previous years, a club could exceed its pool amount and, as a penalty, pay a tax on the overage or forfeit the right to sign players in future signing periods. For the 2018-19 Signing Period, eight clubs will be in the second and final year of the penalty for exceeding their bonus pools in 2016-17. Those clubs may not sign a player for a bonus of more than $300,000 in the 2018-19 signing period.

Beginning with the 2013-14 international signing period (July 2, 2013 – June 15, 2014), clubs were permitted to trade a portion of their international Signing Bonus Pool. Trades are allowed in $250,000 increments. However, no club may increase its pool through trade by more than 75 percent in the 2017-18 and 2018-19 signing periods or by more than 60 percent in subsequent signing periods.
Foreign professional players are not subject to the rules for international Signing Bonus Pools if they are at least 25 years old and have played at least six years in a league deemed to be professional, such as Japan, Korea, Taiwan, Mexico and Cuba.
Japanese high school players are subject to the Japan League draft and may not sign with U.S. clubs. Japanese League players may not become international free agents until they have nine years of service. Players who want to play in the Major Leagues before qualifying for free agency must go through the “posting process,” a system that allows a Japanese club to solicit a release fee from Major League clubs for negotiating rights with the player.
Under the system in place through the 2017-18 off-season, a Japanese club would “post” the player for bidding between November 1 and February 1. Interested Major League clubs then had 30 days to negotiate a contract with the player, with the club signing the player paying the posting fee set by his Japanese team, an amount of no more than $20 million. If the player did not sign, no release fee was paid and the Japanese club retained the rights to the player, and the player could not be posted again until the following November 1.

A new system takes effect for the 2018-19 off-season. Japanese clubs may post a player between November 1 and December 5, starting a 30-day window for interested Major League clubs to negotiate with the player. The club signing the player pays his Japanese team the posting fee, with the amount based on the total guaranteed value of the contract. For a Major League contract with a value of $25 million or less, the fee is 20 percent of the total guaranteed value. For a Major League contract with a value between $25,000,001 and $50 million, the fee is 20 percent of the first $25 million, plus 17.5 percent of the amount exceeding $25 million. For a Major League contract with a value of $50,000,001 or more, the fee is 20 percent of the first $25 million, plus 17.5 percent of the next $25 million, plus 15 percent of the amount exceeding $50 million. For a Minor League contract, the fee is 25 percent of the signing bonus, plus a supplemental fee if the player is added to the Major League roster. A Japanese club receives a supplemental fee of 15 percent of any earned award or performance bonuses, salary escalators or exercised options.

A similar revised posting system takes effect for the 2018-19 off-season for professional Korean players (those players at least 25 years old with six years of experience in the Korea Baseball Organization). Korean clubs may post a player between November 1 and December 5, starting a 30-day window for interested Major League clubs to negotiate with the player. The club signing the player pays his Korean team the posting fee, with the amount based on the total guaranteed value of the contract. For a Major League contract with a value of $25 million or less, the fee is 20 percent of the total guaranteed value. For a Major League contract with a value between $25,000,001 and $49,999,999, the fee is 20 percent of the first $25 million, plus 17.5 percent of the amount exceeding $25 million. For a Major League contract with a value of $50,000,000 or more, the fee is 20 percent of the first $25 million, plus 17.5 percent of the next $25 million, plus 15 percent of the amount exceeding $50 million.
Maximum Salary ReductionIn tendering a contract to a player (or renewing the contract of a player not yet arbitration-eligible), a club’s salary offer may not be less than 80% of the player’s salary and performance bonuses the previous year or less than 70% of his salary and performance bonuses from two years earlier. The 80% requirement does not apply if a player won an arbitration award the previous year increasing his salary 50% or more. For split contracts (paying a player one rate when he is in the Major Leagues and a lesser rate when he is in the minors), the maximum cut rule is 60% of the player’s salary from the previous season.

Minimum SalaryMajor League minimum salary

2021: $555,000, plus cost-of-living adjustment

2020: $555,000, plus cost-of-living adjustment

2019: $555,000

2018: $545,000

2017: $535,000

2016: $507,500

2015: $507,500

2014: $500,000

2013: $490,000

2012: $480,000

2011: $414,000

2010: $400,000

2009: $400,000

2008: $390,000

2007: $380,000

2006: $327,000

2005: $316,000

2004: $300,000

2003: $300,000

2002: $200,000

2001: $200,000

2000: $200,000

1999: $200,000

1998: $170,000

1997: $150,000

1996: $150,000 (7/31/96 through end of 1996 season)

1996: $109,000 (Opening Day through 7/31/96)

1995: $109,000

1994: no agreement

1993: $109,000

1992: $109,000

1991: $100,000

1990: $100,000

1989: $ 68,000

1988: $ 62,500

1987: $ 62,500

1986: $ 60,000

1985: $ 60,000

1984: $ 40,000

1983: $ 35,000

1982: $ 33,500

1981: $ 32,500

1980: $ 30,000

1979: $ 21,000

1978: $ 21,000

1977: $ 19,000

1976: $ 19,000

1975: $ 16,000

1974: $ 15,000

1973: $ 15,000

1972: $ 13,500

1971: $ 12,750

1970: $ 12,000

1969: $ 10,000

1968: $ 10,000

1967: $ 6,000 ($7,000 if on roster 30 days into season)

1947: $ 5,000

1946: $ 5,000

Minor League minimum salary(for players on 40-man rosters for at least a second year or players with at least 1 day of major league service)

2021: $89,500, plus cost-of-living adjustment

2020: $89,500, plus cost-of-living adjustment

2019: $89,500

2018: $88,000

2017: $86,500

2016: $82,700

2015: $82,700

2014: $81,500

2013: $79,900

2012: $78,250

2011: $67,300

2010: $65,000

2009: $65,000

2008: $62,500

2007: $60,000

2006: $54,500

2005: $52,600

Under the 2007-11 CBA, the new minimum for a player placed on the 40-man roster for the first time is $30,000 (50% of minor league minimum). With the 2012-16 CBA, the minimum for those players increased to $40,750 in 2014, $41,400 in 2015 and 2016.
Minor League Free AgencyA player becomes eligible to sign with any organization as a minor league free agent when he has played six full minor-league seasons with the club that drafted him. If a player is released, he becomes a minor league free agent upon expiration of any subsequent contract he signs.
Minor League Rosters
Minor-league rosters consist of an Active List (players currently eligible to play) and a Reserve List (the entire roster). Players may be loaned to other minor league clubs, but they must be returned by September 30. Minor-league clubs may place injured players on the disabled list for 7 or 60 days (the Emergency Disabled List). As with players in the majors, players on the minor-league 60-day disabled list do not count against either roster limit. Age restrictions do not apply to players on rehab assignments.

Single-A clubs: 25 players, with no more than two players with more than five years of minor-league service time.

Short-season Single-A clubs: 30 players. No more than 25 players may be used in a single game. As of July 1, the Active List must include at least 10 pitchers. No more than four players may be 23 years old or older. No more than three players may have four or more years of minor-league service time.)

Advanced rookie clubs: 35 players. No more than 30 players may be used in a single game. As of July 1, the Active List must include at least 10 pitchers. No more than 12 players may be 21 years old or older, and no more than two players may be 23 years old or older. No player may have more than two years as a professional, and no player may have three or more years of minor-league service time.

Rookie clubs: 35 players. No more than 30 players may be used in a single game. As of July 1, the Active List must include at least 10 pitchers. No more than 8 players may be 20 years old or older, including two drafted players and four undrafted players who are at least 21 years old. No player may have more than two years of minor-league service time.

OptionsAn option (optional assignment) allows a club to move a player on its 40-man roster to and from the minor leagues without exposing him to other teams.
After 4 or 5 years as a professional, a player must be added to his club’s 40-man roster or exposed to the 29 other clubs in the Rule 5 draft. (A club has 5 years to evaluate a player who signs his first pro contract at 18 years old or younger, but only 4 years to decide on a player who signs at age 19.) For purposes of calculating years as a pro, the counting begins the day a player signs his first pro contract, not the season he begins to play.
When a player is added to the 40-man roster, his club has three options, or three separate seasons during which the club may to move him to and from the minor leagues without exposing him to other clubs. A player on the 40-man roster playing in the minors is on optional assignment, and within an option season, there is no limit on the number of times a club may demote and recall a player. However, a player optioned to the minor leagues may not be recalled for at least 10 days, unless the club places a Major League player on the disabled list during the 10-day window.
After three options are exhausted, the player is out of options. Beginning with the next season, he must clear waivers before he may be sent to the minors again. See Waivers. Additionally, a player with 5 years of Major League service may not be sent to the minors on an optional assignment without his consent.

Counting option years

If a player is not sent to the minors during a year, an option is not used.

If a player is on the 40-man roster in spring training but optioned to the minors before the season begins, an option is used.

If a player’s optional assignment(s) to the minors total less than 20 days in one season, an option is not used.

A player may be eligible for a fourth option year if he has been optioned in three seasons but does not yet have five full seasons of professional experience. A full season is defined as being on an active pro roster for at least 90 days in a season. The 90-day requirement means short-season leagues (New-York Penn, Northwest, Pioneer, Appalachian, Gulf Coast, Arizona Rookie, Dominican and Venezuelan Summer Leagues) do not count as full seasons for the purposes of determining eligibility for a fourth option.

An option year is not used if a player is injured and spends 30 days or less on an active roster.

Outright assignmentsA player assigned outright to the minor leagues for the first time in his career must accept the assignment. Thereafter, a player has the choice of either 1) rejecting the assignment and becoming a free agent immediately, or 2) accepting the assignment and become a free agent at the end of the season if he has not been returned to the 40-man roster.
A player with 3 years of Major League service may refuse an outright assignment and choose to become a free agent immediately or at the end of the season.
A player with 5 years of Major League service who refuses an outright assignment is entitled to the money due according to the terms of his contract.
Player LimitsThe Major League roster limit is 40 from September 1 until Opening Day, when the number of players must be reduced to 25. For scheduled doubleheaders and makeup games, roster sizes may be increased to 26 players as long as the doubleheader is not being played the day immediately after a cancellation.
Player To Be Named LaterA transaction including a player to be named later must be completed within six months. The player may not be an active Major League player during the interval between the trade and the date the player is named. As a result, most players to be named later are minor leaguers.
At the time of a trade, clubs sometimes agree on a list of players from which the player to be named will be selected. They also may agree on an amount of money to be exchanged in lieu of a player.
Clubs may include a player to be named later in a trade if a player is not eligible to be traded. For example, once a draft pick signs a professional contract, he may not be traded until an entire year has elapsed (the Pete Incaviglia Rule). Additionally, a player on a minor-league reserve list may not be traded between November 20 and the Rule 5 draft in December, so trades during that window may include a PTBNL.
RenewalA club may unilaterally renew the contract of a player not yet eligible for arbitration if the club and the player fail to agree on a salary. A club may not renew a contract at a salary less than 80% of the player’s salary and performance bonuses the previous year or less than 70% of his salary and performance bonuses from two years earlier. See Maximum Salary Reduction.
Restricted ListIf a player, through some action of his own, is unable to render his services to his club, the team may petition MLB to have the player placed on the restricted list. Generally, the list is used for a long-term absence, such as a drug suspension, a visa problem or leaving the club without permission. A player on the restricted list does not count against the 40-man roster, and there is no minimum or maximum length of time he must stay on the list. A player on the restricted list is not paid and does not earn service time.

Rookie Qualification
A player is a rookie unless, during a previous season or seasons, he has:

more than 130 at-bats or 50 innings pitched in the Major Leagues, or

more than 45 days on a Major League active roster during the 25-man limit period (April-August), excluding time on the disabled list.

Rule 5 DraftThe Rule 5 draft is held each December at the Winter Meetings, and it consists of a Major League portion and a minor league portion. By November 20, each club must set its 40-man roster and submit reserve lists for all major and minor-league levels (See Minor League Rosters). Between November 20 and the Rule 5 draft, a club may add Major League free agents to its 40-man roster but may not add any player from its minor league reserve lists.
After 4 or 5 years as a professional, a player must be added to his club’s 40-man roster or exposed to the 29 other clubs in the Rule 5 draft. (Under the new CBA, a club has 5 years to evaluate a player who signs his first pro contract at 18 years old or younger, but only 4 years to decide on a player who signs at age 19.) For purposes of calculating years as a pro, counting begins the day a player signs his first pro contract, not the season he begins play.
Clubs draft in reverse order of their won-loss records in the previous season, and only clubs with less than 40 players on their rosters may take part. To select an eligible player, a drafting club pays $50,000 to the player’s original club. The drafting club must keep the player on its 25-man active roster for all of the next season or put him on waivers. If a third club claims the player on waivers, the third club also must keep him in the majors all season. If the player clears waivers, he must be offered back to his original club for $25,000. A drafting club may work out a trade with the player’s original club so that the drafting club can keep him and send him to the minor leagues.
If, because of injury, a player selected in the Rule 5 draft spends less than 90 days on the active Major League roster, he also must remain on the Major League roster the next season until he earns 90 days of service. Otherwise, he must be put on waivers and offered back to his original club.
The Rule 5 draft also includes two minor-league phases. In the Triple-A phase, a player not protected on his club’s 40-man roster or 38-man Triple-A reserve list may be selected for $12,000. In the AA phase, a player not protected on his club’s 40-man roster, 38-man Triple-A reserve list or 37-man Double-A reserve list may be selected for $4,000. A player selected in the minor-league phase of the Rule 5 draft is not required to play the next season with his drafting club at the higher organizational level.
Service TimeA player earns Major League service time for each day he spends on the active (25-man) roster or on the Major League 15-day or 60-day disabled lists. A player also continues to earn service time while serving any disciplinary suspension or serving in the military.
Under the CBA, 1 year of service is defined as 172 days. A player may earn up to 172 days of Major League service during a championship season (regular season), which lasts 187 calendar days. (Before the 2018 season, the season consisted of 183 days.) If a player is sent to the minor leagues on optional assignment for a total of less than 20 days during a season, he receives service time for the entire season.

Service time specifics

A player promoted from the minor leagues is credited with ML service beginning with the date he physically reports.

Service time is not interrupted when a Major League player is traded and reports to his new club in the normal course (within 72 hours).

A player demoted to the minor leagues is credited with ML service through the date of the assignment.

A player who is unconditionally released is credited with ML service through the date he was notified of his release.

A Major League player designated for release or assignment continues to be credited with service after the designation, through the date of the actual assignment or the date he is notified of his unconditional release.

For a player who appears on the opening day roster, ML service time is credited as of the earliest scheduled opener, without regard to the actual opening date of his own club.

ML service time is not credited during any period or periods of optional assignment totaling 20 days or more during a single season.

Service-time landmarks

3 years

A player with at least 3 years of Major League service is eligible for arbitration. (Eligibility for arbitration also is extended to players just shy of 3 full years of service. See Super Two.)

In addition, a 3-year player may not be removed from the 40-man roster without his permission. The player may choose to be released immediately or at the end of the season.

5 years

A player with at least 5 years of Major League service may not be demoted to the minor leagues on optional assignment without his consent. A 5-year player who refuses an optional assignment to the minors must be offered his release.

Prior to 2007, a player with 5 years of service who had been traded in the middle of a multi-year contract could, during the off-season, require his new team to either trade him or let him become a free agent. If the player was eventually traded, he was not eligible to demand a trade again under the current contract and lost free agency rights for 3 years. However, the 2007-11 CBA eliminated this right for players signing multi-year contracts in the future. Players signed to multi-year deals before the effective date of the 2007-11 CBA (November 2006) retained the right to demand a trade if traded during the life of their current contracts.

6 years

A player with at least 6 years of service is eligible for free agency.

10 years

A player with at least 10 years of service may not be traded or assigned without his consent, provided the player has spent the last 5 years with his current team.

Super 2A player with almost 3 years of Major League service may become eligible for arbitration. To qualify, a player must:

have at least 2 years of service, but less than 3, and

have accumulated at least 86 days of service in the previous year, and

rank in the top 22% of all 2-year players in service time.

Recent cutoff points for Super Two eligibility:

2009-10: 2 years, 139 days

2010-11: 2 years, 122 days

2011-12: 2 years, 146 days

2012-13: 2 years, 140 days

2013-14: 2 years, 122 days

2014-15: 2 years, 133 days

2015-16: 2 years, 130 days

2016-17: 2 years, 131 days

2017-18: 2 years, 123 days

Ten-and-Five RightsA player with at least 10 years of Major League service may not be traded or assigned without his consent, provided the player has spent the last 5 years with his current team.
Tender Date / Non-tenderMajor League clubs must offer contracts to players on its roster by December 12. In general, an offer may not be less than 80% of the player’s salary and performance bonuses the previous year or less than 70% of his salary and performance bonuses from two years earlier.
If a club has no interest in keeping a particular player, the club may choose to non-tender him, or to not offer him a contract. A player generally becomes a candidate to be non-tendered when he is arbitration-eligible and his club determines he is not worth the salary he might command in arbitration. A player who is non-tendered becomes a free agent and may sign with any of the 30 Major League clubs, including his former team, at any price.
Trading Regulations Between the end of the regular season and July 31, a player may be traded without passing through waivers. Between August 1 and the end of the regular season, a player may not be traded unless he first passes through revocable Major League waivers.
In August, clubs submit revocable waiver requests for most players. If a player is not claimed within 47 business-day hours, he may be traded to any club. If a player is claimed by another club, the request may be withdrawn, allowing the player’s current club to pull him back. However, the player’s current club also may 1) work out a trade with the claiming club within 48 ½ business-day hours, or 2) elect to allow the claiming club to take the player and assume responsibility for his current contract.
If more than one club claims a player on Major League waivers during the August 1-November 10 waiver period, the club with the lower winning percentage has priority, with American League clubs holding priority for AL players and National League clubs holding priority for NL players.
A player acquired after August 31 is not eligible to be placed on the post-season roster with his new club.
The commissioner’s office must approve of any trade involving 1) a player on the disabled list or 2) a transfer of more than $1 million in cash.

WaiversA waiver is permission from other clubs to trade or assign a Major League player’s contract. A waiver request is filed through the Commissioner’s Office and granted for a limited time period. There are four types of waivers: 1) unconditional release waivers, 2) outright waivers, 3) optional waivers, and 4) trade assignment waivers.Unconditional Release WaiversA club that wishes to release a player places him on unconditional release waivers. He then may be claimed for $1, but the player has five days to choose whether to accept it or refuse the claim and become a free agent. If the player rejects the claim, he become a free agent and forfeits the remaining money due on his contract. If the player accepts the claim, the new team pays him under the contract he signed with his former team. If no team claims the player, he becomes a free agent.Irrevocable Outright WaiversA club that wishes to remove a player from its 40-man roster but keep him in its minor-league system must first place him on outright or special waivers. Outright waivers are not revocable, so a player claimed on outright waivers may not be pulled back by his original club. A club may not request outright waivers on a player with a complete no-trade clause or on a player ten-and-five rights. Through 2006, outright waivers secured between September 1 and 30th day of the next season were known as Special Waivers. The owners and players eliminated Special Waivers in the 2007-2011 Collective Bargaining Agreement. Optional WaiversPrior to the 2017-21 CBA, optional major league waivers were required when optioning a player who had options remaining but who was more than three calendar years removed from his first appearance on a Major League roster. Because optional waivers were revocable, players usually cleared in this scenario.Trade Assignment WaiversTrade assignment waivers are utilized in August as a means to gauge trade interest. Between August 1 and the end of the season, a player may not be traded without first clearing trade assignment Major League waivers. If the player is not claimed within 47 business-day hours, he may be traded to any club. If the player is claimed by another club, the request may be revoked, allowing his current club to pull him back. However, the player’s current club also may 1) work out a trade with the claiming club within 48 ½ business-day hours, or 2) elect to allow the claiming club to take the player for a $20,000 fee and assume responsibility for his current contract. If more than one club claims a player, the club with the lower winning percentage has priority, but American League clubs have priority for AL players, and National League clubs have priority for NL players. Once a player on major league waivers has been claimed and the waiver request revoked, any subsequent request for major league waivers during the same waiver period is irrevocable. A player with a no-trade clause who is claimed on Major League waivers must be pulled back if the player’s no-trade clause allows him to block a deal to the claiming club. However, the player may waive the no-trade clause and join the claiming clubWaiver periods & claim priorityNovember 11 – April 30 (or 30th day of next season): Club with worst won-lost record in the previous season has priority.

May 1 – July 31 (31st day of the season – July 31): Club with the worst won-loss record in the current season has priority.

August 1 – November 10: Club with the worst won-loss record in the current season has priority, but American League clubs have priority for AL players, and National League clubs have priority for NL players.